Stock market today: Wall Street rises toward records
AP Business Writer
NEW YORK (AP) — U.S. stocks are rising toward records Monday and adding to last week’s gains.
The S&P 500 was 0.8% higher, as of 9:40 a.m. Eastern time, and on pace to edge past its all-time high set two weeks ago. The Dow Jones Industrial Average added 459 points, or 1%, to its own record set on Friday, while the Nasdaq composite was 1% higher.
Treasury yields also eased in the bond market amid what some analysts were calling a “Bessent bounce” after President-elect Donald Trump said he wants Scott Bessent, a hedge fund manager, to be his Treasury Secretary.
Bessent has advocated for reducing the U.S. government’s deficit, which is how much more it spends than it takes in through tax and other revenue. Such an approach could soothe worries building on Wall Street that Trump’s policies may lead to a much bigger deficit, which in turn would put upward pressure on Treasury yields.
After climbing above 4.44% immediately after Trump’s election, the yield on the 10-year Treasury fell back to 4.30% Monday, down from 4.41% late Friday. That’s a notable move for the bond market, and lower yields help make it cheaper for all kinds of companies and households to borrow money. They also give a boost to prices for stocks and other investments.
The two-year Treasury yield, which more closely tracks the market’s expectations for what the Federal Reserve will do with overnight interest rates, also slid.
The Fed began cutting its main interest rate just a couple months ago from a two-decade high, hoping to keep the job market humming after bringing high inflation nearly all the way down to its 2% target. But immediately after Trump’s victory, traders reduced bets for how many cuts the Fed may deliver next year. They were worried Turmp’s preferences for lower tax rates and higher spending on the border would balloon the national debt. On Monday, traders went back to increasing their bets for the number of cuts possible in 2025, according to data from CME Group.
A report coming on Wednesday could influence how much the Fed may be willing to cut rates. Economists expect it to show that an underlying inflation trend the Fed prefers to use accelerated to 2.8% last month from 2.7% in September. Higher inflation would make the Fed more reluctant to cut rates as deeply or as quickly as it would otherwise.
Goldman Sachs economist David Mericle expects that to slow by the end of next year to 2.4%, but he said it would be even lower if not for expected tariff increases on imports from China and autos favored by Trump.
In the stock market, Bath & Body Works jumped 21% after delivering stronger profit for the latest quarter than analysts expected. The seller of personal care products and home fragrances also raised its financial forecasts for the full year, even though it still sees a “volatile retail environment” and a shorter holiday shopping season this year.
Much focus has been on how resilient U.S. shoppers can remain, given high prices across the economy and still-high interest rates. Last week, two major retailers sent mixed messages. Target tumbled after reporting sluggish sales in the latest quarter and giving a dour forecast for the holiday shopping season. It followed Walmart, which gave a much more encouraging outlook.
Elsewhere on Wall Street, Macy’s said its sales for the latest quarter were in line with its expectations, but it will delay the release of its full financial results. It found a single employee had intentionally hid up to $154 million in delivery expenses, and it needs more time to complete its investigation.
Macy’s stock fell 3.8%.
In stock markets abroad, indexes rose modestly across Europe after finishing mixed in Asia.
In the crypto market, bitcoin was trading around $97,000 after threatening to hit $100,000 late last week for the first time.
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AP Business Writer Elaine Kurtenbach contributed.
